Air New Zealand is slashing its international network by 85 per cent. Photo / Dean Purcell
Air New Zealand is slashing its international network by 85 per cent. Photo / Dean Purcell
Air New Zealand is likely to cut its workforce by nearly a third as it battles to survive plunging demand for air travel.
On current modelling, it will be looking to reduce staff across by up to 30 per cent. That would be 3750 of its 12,500 staff.
Air NewZealand chief executive Greg Foran said the company was more severely impacted than most by the impact of the coronavirus.
''One of the harsh realities we find ourselves facing is that we will require fewer Air New Zealanders as we move to grounding most of our international operations and paring back significantly our Tasman, Pacific Island and domestic services.''
The cuts will be across the board and in some areas there may be cuts of more than 30 per cent, said Foran in a newsletter to staff.
They could also be less given the need for a core team in some areas to keep the airline running in its current reduced schedule and for when it scaled back up.
''Demand for travel will take a prolonged period to normalise and the Air New Zealand we look at in 12 months is unlikely to be flying the same capacity and number of customers we were before Covid-19.''
Foran has already volunteered to take a 15 per cent cut to his $1.65m basic pay and today said the other nine members of the executive would do so until the end of the year.
Travel restrictions have largely cut New Zealand off as a destination and the airline's domestic business is under pressure too.
The airline announced today it would cut its international network by up to 85 per cent and it has taken a massive revenue hit.
"The industry is aware that, until this unprecedented situation developed, Air New Zealand would have had forecasted annual revenue of approximately $6 billion dollars. I would no longer be surprised if that forecast is reduced to around $1billion," said Ridling.
Air New Zealand has been regularly talking to the Government, which has a 52 per cent stake, and some form of financial underwriting may be needed.
The association and other unions met with Air New Zealand senior management today to discuss the network cut announcement. Managers were now working on how to implement the staff cuts.
''They're making no exceptions - it's not unionised (about 70 per cent of staff) versus the rest of the workforce,'' he said.
''This is not your typical union-boss dispute. We've never seen this before, there's no playbook on this. We have to work together to get this right.''
''It wouldn't take a rocket scientist to figure out this is a cash flow problem - their revenue has disappeared. They would want to make the cuts as soon as they can.''
He said the regular talks with the airline's chief executive Greg Foran and senior managers had been constructive.
"As NZALPA represent the majority of New Zealand's pilots and nearly every air traffic controller in the country, our greatest concern is for the employment and welfare of our members and their families, and that they are fully represented while commercial decisions are made due to the effects of the Covid-19 virus.''
The airline announced capacity reductions on their long haul network. They will be suspending flights between Auckland and Chicago, San Francisco, Houston, Buenos Aires, Vancouver, Tokyo Narita, Honolulu, Denpasar and Taipei from March 30 to June 30.
It is also suspending the London-Los Angeles service from March16 (ex-Los Angeles) and March 17 (ex-London) through to June 30.
The Tasman and Pacific Island network capacity will significantly reduce between April and June. Air New Zealand's domestic network capacity will be reduced by around 30 percent in April and May. Air New Zealand says its has no current plans to suspend routes but will cut frequency.
Other NZALPA members were waiting for announcements from Virgin and Qantas this afternoon where big cuts are also expected.
Ridling started flying with Air NZ in 1989 and while he would like to minimise cuts to zero by making savings in other areas, he conceded this would be difficult.
''We've never seen it go this fast. On Friday afternoon this was a $6 billion in revenue business. It's down to $1b now. The speed this has developed is incredible.''
The Government had a big part to play supporting aviation with its economic assistance package to be unveiled tomorrow.
Throughout aviation - including air traffic controllers, security staff and Civil Aviation - jobs were at risk because of the impact of coronavirus.
New Zealand AIrline Pilots Association President Andrew Ridling. Photo / Supplied
Hawaiian Airlines today announced it will temporarily suspend service between Honolulu and Auckland later this month due to new government entry restrictions.
The airline currently flies three times a week. The flights will stop on March 22 through to May 31.
It is also suspending services to Australia.
The airline has been flying to New Zealand for the past seven years in response to the COVID-19 pandemic.
"We respect the efforts of our Australian and New Zealand neighbours to institute stringent public health measures, and we remain dedicated to resuming our service as we continue to closely monitor evolving market conditions and regulations," said Theo Panagiotoulias, senior vice president for global sales and alliances at Hawaiian Airlines.
